Capitalism is failing: Socialism is the alternative.

This is the text of a speech I gave today in the first public forum of the International Socialist Organization at Northwestern. I publish it here in case anyone wants to check my sources or give a closer reading to something I said.

The past four years have been devastating for working people everywhere. An extreme case is Greece, where Prime Minister Samaras has compared the situation to the American Great Depression of the ’30s. There, unemployment is over 20% and standards of living have been dropping precipitously, while the EU and the IMF continue to push austerity measures on workers that have already suffered significant cuts in wages and benefits.

But we need not go that far to see the effects of this global slum, after all, the crisis started right here in the United States. The income of the average American family has been declining for four years straight. Despite some recovery, unemployment and underemployment are still above 15%. Moreover, 3 in 5 jobs added last year were low skill and low wage: hardly the American dream. And while some will have you believe this crisis affects all Americans equally, the fact is American corporations have been breaking their own profit records every year since the crisis started, and the CEOs that head them have also received record pay. So it’s no surprise some pundits have loudly declared the end of the Great Recession: for those standing at the top, things have never been better. Profits have become completely divorced from the economic fortunes of working people.

“Hey, at least we’re not Greece,” some will say. But these numbers hide a cruel reality. Because while the average American may be doing better than the average Greek, the marginalized groups that are bearing the brunt 0f the recession might be doing just as bad. Latino households have lost 66% of their wealth, while blacks have lost 53%. The wealth gap between whites and people of color is now the widest since the government started recording such data a quarter of a century ago, with median white wealth 20 times that of blacks and Latinos.

Down here in Chicago, the situation’s even more dire for blacks and Latinos. More than half of black men in Chicago are out of a job. A telling story came early last summer: when a Costco opened in the west side with 130 job openings, 30,000 people applied.

Some in the right might attribute this to sudden mass laziness from blacks and Latinos, but of course, that doesn’t just sound crazy, it is. Blacks and Latinos are not unemployed because they want to, but because they’ve been discriminated both by the criminal injustice system and by the labor market (White Out: The Continuing Significance of Racism, Bonilla-Silva and Doane 2003). This no longer done through the old appeal to white supremacy, but as Michelle Alexander, author of The New Jim Crow tells us:

A new race-neutral language was developed for appealing to old racist sentiments, a language accompanied by a political movement that succeeded in putting the vast majority of blacks back in their place. Proponents of racial hierarchy found they could install a new racial caste system without violating law or the new limits of acceptable political discourse, by demanding “law and order” rather than “segregation forever.”

An example of this kind of language is the discourse that places blame for the growing income gap on the poor choices of, say, black mothers. Some of you may have seen an awful article on the New York Times last July titled “Two Classes, Divided by ‘I Do’” (don’t laugh yet). The article cited a number of economists that attributed the income gap to a growing “marriage gap.” The author (a man) tells us the story of two mothers living in the same city and making similar incomes, but with very different standards of living. He then tells us: “What most separates them is not the impact of globalization on their wages, but a 6-foot-8-inch man named Kevin.” (You can laugh now.)

As Jen Roesch writing for Socialist Worker tells us, the problem here is not the lack of a Kevin, but the fact that 40 years after the women’s liberation movement, women still make 77 cents for every man’s dollar, and that traditionally “feminine” professions are still undervalued in our society. One need only see the national backlash against the Chicago teachers’ strike (87% of them are women), who people claim are “overpaid.” Maybe if the majority of engineers were women they’d say they’re overpaid too.

Some of you may have seen images last week of the tens of thousands of Spanish youths that took to the streets to demand a solution to a crisis that has left more than half of them unemployed. Young people everywhere have been very hard hit by the crisis. Here in the US too, more than half of recent college graduates are either unemployed or underemployed. A study published earlier this month showed that an astounding 85% of college seniors are planning to move back home after they graduate. And it’s not just liberal arts majors having trouble. Among the 25 majors with highest unemployment rates you’ll find industrial engineering, international business, legal studies, materials science, journalism, biochemistry, etc.

Speaking of college graduates, we can’t forget the other burden on top of many of us: student loans. Student loan debt in the US is now higher than credit card debt and recently surpassed one trillion dollars. The average per student debt is over $25,000. And for all the talk on the Daily about how great our financial aid program is, half of undergrads here graduate with some student debt [$20,000 on average]. Some have called the student debt bubble “subprime loan disaster part 2.”

For those who already forgot, the burst of the subprime mortgage loan bubble is what triggered the Great Recession way back in 2007. This whole talk about bubbles bursting has become normalized these days; we have dot-com bubbles, real estate bubbles, rice bubbles, etc. But let us step back for a bit and think about what they mean, using the example of the real estate bubble.

A stock broker in Wall Street realizes the price of houses is going up, so he’s like “Hey, that’s a good place to put my money.” Suddenly hundreds of investors are pouring their money into the purchase, development, and sale of houses. As a result, prices continue going up, and more and more land is turned into more and more empty mansions to be sold to the highest bidder.

At first, there seems to be nothing wrong with that. We need houses, right? 3.5 million Americans are homeless at some point of any given year, almost a million are regularly homeless. But that’s not the pressure that drives Wall Street into investing in more houses. It’s not like you’ll see them walking around the poor neighborhoods of New York City and saying, “I know what America needs! More houses!” What drives investment and production in capitalist society is merely the anticipated profit to be made from such investment. And profits are only very loosely tethered to the actual needs of the majority of people.

So when prices indicate there is money to be made in building houses but no one can actually afford to buy them, the whole system runs out of control because of the lack of coordination on the supply side. Each capitalist does what they think will bring them profits in competition with every other capitalist. And so, thousands of houses get built, and then they just sit around collecting dust while the homeless beg outside. Back in the day, this would mean that producers would become insolvent and collapse, but nowadays capitalists have become a lot smarter. They use loans to sell the houses to people who can’t afford them, and then it’s the people that become bankrupt for the mistakes of capitalists. Workers get laid off, but companies continue making record profits. Even when corporations do take a hit from the crisis they’ve caused, there’s always the helpful government to bail them out at taxpayers’ expense. That is, they wreck the world economy, and then they get paid billion of dollars to do it! So really, crisis is a win-win situation for capitalists; they take profits from the bubbles, and they lose nothing when they burst. On the other hand, workers that had nothing to do with starting the crisis are not only the hardest hit, but on top of that they have pay for bailouts and suffer austerity measures because of “tough economic times.” The big fish keep getting bigger, while we have to tighten out belts.

The best description of such crises came from Karl Marx and Friedrich Engels, in The Communist Manifesto:

Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.

This was written in the 19th century, but doesn’t it sound familiar? As we speak, the crisis is still winding down. Every day, 100 families get evicted from their homes. All the while 8 million houses sit empty, many times more than there are homeless people in the United States. And what solutions do capitalists offer to the crisis? Less regulation, less democratic control over the market. More wars in the Middle East to ensure a constant supply of oil. More environmental destruction to increase production. And not because they’re stupid, or because they don’t realize it will pave the way to bigger crises, as liberal critics often say. But because property relations under capitalism do not allow for a different policy: asking the capitalists to espouse welfare and regulations on the market would be tantamount to asking them to willingly give away their power, for the power of capitalists always rests primarily over their complete control of property.

People often talk about these things with a fatalist tone. “Yeah, but that’s how the market is, what are you gonna do about it?” They talk about the market as this sort of deified entity, standing above people, controlling their lives. All in complete contradiction to the fact that the market is entirely man-made. You may not ever meet the people that made your laptop, shipped it to the US, or decided how much it costs. But rest assured that there are always people behind it. If the market is anarchic it’s not because production is beyond human control, but because we choose to let the owners of property to control production at every step of the way, instead of collectively exerting democratic control over it.

That is the solution to this crisis, and to every crisis before it: socialism. A radical democratic system that puts human need at the center of our economy. A system where houses and cars and laptops get produced not because they would best satisfy corporate greed, but because they would best satisfy real people’s needs. A system in which workers control the means of their subsistence: that is, a system in which the people who do all the work and produce all value in our society take center stage, instead of a small class of parasites who passively profit from their ownership of the means of production.

Every once in a while (though not so much since the crisis started), some pundit will write the same old boring article in the New York Times about how “capitalism is the end of history, and how some people may be unhappy, but this is all we’ve got. And what’s the alternative anyway? Do you want Stalin and his gulags?”

Vladimir Lenin, leader of the Russian revolution, said in The State and Revolution that “the form of the state under socialism is the most complete democracy.” Anybody who believes that the Soviet rule by party bureaucrats was “the most complete democracy” either put too much vodka in his drink or has a very weird conception of democracy. Socialism is workers’ power, not power of some unelected dictator ruling with an iron fist in the name of the proletariat. And it is the workers who must be in charge of all production and distribution of goods in a socialist society.

People will often condemn socialists for being “too idealistic.” They’ll say “socialism sounds nice in theory, but it could never work in practice.” That’s not only nonsensical, it’s also just not true. History has showed us plenty of instances of workers taking back power over their lives, most recently right here in Chicago with the Chicago Teachers’ Union strike. And while what they achieved was not socialist revolution, they achieved many reforms that give power over education back to the teachers. For example, the current contract will allow teachers to design their own lesson plans.

Perhaps more importantly, teachers have become emboldened to fight for their rights against incursions by corporate education “reformers,” and a whole layer of workers in Chicago and across America have learned that when we strike and fight back, we can win.

Further from us geographically, but closer in some other respects is the student movement in Québec. Through a wave of strikes and demonstrations that lasted half a year, they have recently stopped the government from raising their tuition, and they have gone back to being the province with the cheapest education system in North America. They also abolished a new law that limited students’ right to protest.

These instances of working class power show us the way to socialism, not only in the form of the struggle, but also in the types of democratic structures they organically create. The Québec strikes were led by local General Assemblies, in which every student has a voice. The CTU strike was led by an elected House of Delegates, and when the contract was up for a vote, delegates went back to their schools to discuss it with their fellow teachers. No political structure under capitalism allows for that kind of radical democracy: the free market stands in direct opposition to every form of worker power. Just hear the cries of outrage in the capitalist press after the teachers’ union decided to ask their members whether they wanted to accept their contract or not.

And through these struggles workers also overcome the divisions of race, sex and gender that the capitalist class encourages in order to keep workers from fighting together for their collective economic interests. Who benefits the most from having different wages for blacks or women but the capitalists? If they need to lower costs, they can hire blacks or women. They’re also an obstacle to working class unity. When asked why they wouldn’t let black men in their union, a railroad worker in Georgia once said: “We would rather be absolute slaves to capital than to take the black man into our lodges as an equal and brother.” (Whitewashing Race, Brown et al.). And slaves to capital they were. We must overcome such divisions, not only as a necessity for building socialism, but also because under socialism the worth of a human being cannot be based on the color of their skin, their sex, their gender, or their national origin.

I’m not just giving this speech as an intellectual exposition of socialist ideas. We in the International Socialist Organization are a group of committed activists fighting for reforms that help workers and all oppressed people, and ultimately for the complete emancipation of humanity.